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2025 Supreme(Online)(ITAT) 581
INCOME TAX APPELLATE TRIBUNAL (AGRA BENCH)
SHRI RAMIT KOCHAR, ACJ
AASTITVA JAIN FAMILY TRUST ASHOKNAGAR – Appellant
Versus
THE INCOME TAX OFFICER CPC BENGALURU BENGALURU – Respondent
ITA 88/AGR/2024
Sh. Subhash Chand Jain, CA; Sh. Shailendra Srivastava, Sr. DR
The ITAT directed the CIT(A) to investigate the service of intimation and consider the condonation of delay application, emphasizing principles of natural justice in tax proceedings.
Headnote:(A) Income Tax Act, 1961 - Sections 143(1), 164(1), and 249(2) - Appeal against dismissal of appeal by CIT(A) due to delay in filing - The appellant, a Private Discretionary Trust, contended that the delay was due to lack of knowledge of the demand raised by CPC - The CIT(A) dismissed the appeal on grounds of limitation without adjudicating on merits - The ITAT directed the CIT(A) to investigate the service of intimation and decide on the condonation of delay application. (Paras 4.1, 5.1, 6.1, and 6.2)
(B) Delay in filing appeal - The appellant argued that the delay was unintentional and due to not receiving notice of demand until recovery notice was issued - The ITAT emphasized the need for proper investigation into the service of notice and principles of natural justice. (Paras 5.1, 6.1, and 6.2)
Facts of the case:
The appellant trust filed a belated return of income for AY 2015-16, which was processed by CPC, leading to a demand raised at Maximum Marginal Rate instead of Normal Rate.
Findings of Court:
The ITAT restored the matter to CIT(A) for fresh consideration of the condonation of delay application and to adjudicate the appeal on merits if delay is condoned.
Issues: The main issues were the justification for the delay in filing the appeal and the applicability of Maximum Marginal Rate versus Normal Rate of taxation.
Ratio Decidendi: The court ruled that the CIT(A) must investigate the service of the intimation and consider the principles of natural justice before dismissing the appeal on grounds of delay.
Result: Appeal allowed for statistical purposes.
ORDER
This appeal in ITA No. 88/Agr/2024 for the assessment year 2015-16 has arisen from the appellate order dated 29.01.2024 [DIN & Order No. ITBA/APL/S/250/2023-24/1060220415(1)], passed by learned ADDL/JCIT(A)-7, Mumbai, which appeal in turn, has arisen from the intimation/order dated 19.10.2017 passed by Central Processing Center(CPC), Bengaluru u/s. 143(1) of the Income-tax Act, 1961.
2. Grounds of appeal raised by the assessee in the Memo of appeal filed with Income-tax Appellate Tribunal, Agra Bench, Agra, reads as under :
“1. On the facts and circumstances of the case the Commissioner of Income Tax (Appeals) has erred in dismissing the appeal on the ground that appellant has delayed in filing of appeal and rejected the condonation application considering reason of delay as not bonafide.
2. On the facts and circumstances of the case the Commissioner of Income Tax (Appeals) has erred in not providing appropriate opportunity of being heard to the appellant for explaining the reason for delay in filing of appeal and dismissed the appeal which is against of law and principle of natural justice.
3. On the facts and in the circumstances of the case and in law the Learned CIT(A) has erred in confirming to action of the AO CPC who considered the Status of appellant as charitable trust instead of Individual/AOP.
4. On the facts and in the circumstances of the case and in law the Learned CIT(A) has erred in confirming the action of learned AO CPC who wrongly calculated to the tax liability in the intimation u/s 143(1) of the assessee trust by confirming to tax at Maximum Marginal rate instead of Normal Rate because appellant trust is a Private Discretionary trust and will hold same status as the beneficiaries/individual.
5. On the facts and in the circumstances of the case and in law the Learned CIT(A) has erred in confirming the action of learned AO CPC who wrongly assessed to tax Rs. 1,12190/- just ignoring to the fact that appellant trust is Private discretionary trust who hold the status of Individual and will be liable to Tax at Normal rate instead of MMR. Therefore since income was below taxable limit, hence no tax liability would arise and be deleted.
6. The appellant trust denies liabilities to be assessed to interest u/s 234 A, B & C.
7. That the appropriate order for granting justice and relief be passed.
8. Your appellant reserves its right to add to amend to alter or to modify any of above grounds and to pursue any other or further grounds as may be required.”
3. Brief facts of the case are that the assessee filed return of income belatedly for the impugned assessment year on 18.02.2017 u/s. 139(4) of the Act, declaring income of Rs. 2,41,000/-. The CPC processed the return of income and issued intimation/order dated 19.10.2017 u/s. 143(1) of the Act, computing income of the assessee at Rs.2,41,000/- wherein returned income was accepted and applied maximum marginal rate (MMR) of taxation against the assessee.
4. Aggrieved, the assessee filed first appeal before ld. CIT(A) on 04.11.2023, which is an appeal filed belatedly by the assessee by 2176 days beyond the time prescribed u/s. 249(2) of the Act. During the course of appellate proceedings, in the Statement of Facts, assessee submitted as under :
“1. Appellant assessee is a Private discretionary Trust which is created by will of Late Smt. Kusum Bai exclusively for the benefit of relatives dependent for their support and maintenance, hence filed its income Tax return for the A.Y.2015-16 on 18.02.2017 vide acknowledgement no.626547700180217 declaring his total income Rs 241000/- without any tax liability being income below taxable limit by virtue of Section 164(1) of the Income Tax Act but order u/s143(1) was passed on 19/10/2017 with demand of Rs 112190/- after calculating tax on maximum marginal rate instead of Normal Tax even private family trust in which beneficiary is not having any taxable income.
1. The CPC Bengaluru has raised demand u/s 143(1) of the Income Tax Act after c
